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How Do Retail Sales Affect Mortgage Rates?

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Old 07-11-2012, 08:56 AM
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Default How Do Retail Sales Affect Mortgage Rates?

The retail sales statistics are one of the tools that banks use to get a pulse of the economy. If the American people are buying more things, it can be assumed that the economy is improving.

The banks see the boost in retail sales as a boost in demand (in this case, a demand for new things in general, including new houses). And, mortgage lenders -- just like any other business -- live and die by supply and demand. The higher the demand for their product, the more they can charge for it.

Does this mean we are likely to see a rise in mortgage rates as we approach holiday season and into early next year?
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Old 13-11-2012, 01:57 AM
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Actually, banks in the US price mortgages with only two factors in mind:

1) What mortgage-backed securities are selling for on Wall Street.
2) Their own internal supply/demand (they raise rates to slow applications).

Wall Street traders look at retail sales when bidding on mortgage-backed securities.
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Old 30-03-2013, 03:49 AM
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A few other factors of note made a difference in mortgage rates:
  • Continued Jobless Claims dropped to the lowest level since July 2008
  • Empire State manufacturing jumped to the highest level since May
  • The Fedís Yellen expressed support for easy-money policies to help the job market
  • Gold prices declined below $1,610 per ounce to the lowest level in six months
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Old 26-04-2013, 07:26 AM
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Homes are affordable like never before. Low mortgage rates had been the major contributing factor for this, says NAR. However, it is indeed a fact that mortgage rates are higher by 1/4 % since the retail sales data was released.
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